A.M. Best Affirms Rating of Hang Seng Life Limited; Assigns Issuer Credit Rating.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) and assigned an issuer credit rating of "aa-" to Hang Seng Hang Seng An index of the leading stocks on the Hong Kong stock market. Notes: The Hang Seng Index (HSI) comprises different stocks that are representative of the whole Hong Kong market. See also: DAX, Index, Nikkei, S&P 500 Life Limited (Hang Seng Life) (Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. ). The outlook for both ratings is stable. The ratings reflect Hang Seng Life's robust new business growth, satisfactory operating performance, growth in embedded value Embedded Value A common valuation measure used outside North America particularly in the insurance industry. It is calculated by adding the adjusted net asset value and the present value of future profits of a firm. , extensive distribution reach and modest capitalization level. Hang Seng Bank Hang Seng Bank Limited (Traditional Chinese: 恒生銀行有限公司) HKSE: 0011 is the second largest bank in Hong Kong. It is a listed company but it is majority owned (62. has a 50% ownership in Hang Seng Life and has allowed the insurance company to tap into the mass market through the bank's extensive branch network. This distribution capability has given Hang Seng Life a strong platform for growth and a competitive advantage over its agency-reliant competitors in acquiring new business and servicing existing customers. Hang Seng Life experienced strong growth in the individual life market in 2005. Hang Seng Life's individual life in-force market share was approximately 7.2% in September 2005 compared to 4.2% in 2004. The company's embedded value increased by approximately 25% in 2005. Offsetting factors include pressure on capital from new business growth and intense competition in the domestic life insurance market. Recent growth in the individual life business has exerted significant pressure on Hang Seng Life's capitalization. Despite a capital injection of HKD HKD In currencies, this is the abbreviation for the Hong Kong Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 200 million (USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 25.6 million) in December 2005, Best's Capital Adequacy Ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. , which measures capitalization on a risk-adjusted basis, reflects Hang Seng Life's moderate capitalization on a stand-alone basis. Given Hang Seng Life's strong growth in the life business, further strengthening of its capital base would be beneficial. Finally, Hang Seng Life's recent growth momentum is expected to be counteracted by intense market competition over the longer term, despite having a competitive advantage in generating new business through Hang Seng Bank. For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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